3 Principles to Build an Effective Measurement Strategy 

Many brands struggle with measurement, a challenge that comes with very real costs. According to BCG, inaccurate measurement results in a 65% higher cost of acquisition. On the other hand, brands with mature measurement practices see up to a 60% increase in sales and a 10x boost in return on advertising spend (ROAS). Far from being a cliché, measurement truly matters. But to harness this opportunity, brands need a strategy based on three key principles: unified, reliable, and actionable measurement. These are the pillars of Amazon Ads' measurement approach.

Far from a cliché, measurement actually matters. But to realize this opportunity, brands need a strategy built on three key principles: measurement that is unified, reliable and actionable. These are the principles that form the backbone of the Amazon Ads approach to measurement.

Principle 1: Measurement must be unified 

Today's marketing is multichannel and requires capturing a wealth of signals. As noted by Insider Intelligence, as brands engage with customers, signals are captured across different formats, channels, and systems, often stored in silos and analyzed in isolation. By integrating and unifying these signals, brands can bridge the gap between disconnected datasets, gaining a better understanding of the holistic impact of their marketing activities across channels. Unified measurement also helps brands comprehend the incremental impact of each channel on an overall campaign.

Consider shopping to illustrate this principle. Nowadays, customers choose to shop through a variety of online and offline channels during their buying journey. In fact, according to a global consumer study by Shopify, 54% of consumers like to learn about a product online and then make their purchase in a physical store. Effective measurement means gathering signals from all these channels. One way to achieve this is by unifying signals from owned and third-party sources, which is what Amazon Ads does, for instance. In addition to measuring billions of Amazon's own signals (based on interactions within Amazon properties), the company partners with nearly 30 external measurement providers such as IRI, Nielsen, and Kantar Millward Brown to help advertisers understand the impact of non-Amazon properties on purchase activity. For example, if a brand runs an Amazon Ads campaign, it can drive offline and/or off-Amazon purchases. By incorporating these signals into Amazon Ads reports, advertisers can gain a better understanding of the overall campaign impact as well as how they can optimize ad spend and drive performance.

Principle 2: Measurement must be reliable  

Measurement is only as good as the quality of your signals. 

Given the complexity of modern marketing, advertisers increasingly rely on technology to accurately capture and interpret signals. Evaluating the reliability of a measurement solution is based on criteria such as sound methodology, transparency, objectivity, and innovation.

Measurement solutions grounded in rigorous scientific methodology, best practices, and industry standards give advertisers confidence that the results they see align with reality. Good solutions are transparent about their methodology, providing clear insights into how data is collected and analyzed.

Objectivity is also crucial. Besides reporting on performance, a reliable measurement solution should provide context, such as industry standards and benchmarks, so that advertisers can evaluate campaign effectiveness through an objective and impartial lens.

Of course, as the advertising industry evolves, measurement will also evolve. Therefore, an important factor in the reliability of a measurement solution is innovation and the ability to develop tools that can respond to and anticipate changes. For example, as the industry moves away from cookies and mobile ad identifiers (MAIDs), Amazon Ads is introducing solutions like Modeled Conversions, which help advertisers account for conversions when direct linking to events on Amazon.com is not possible.

Principle 3: Measurement must be actionable 

Being proactive is essential in measurement. 

While measurement shows the results of marketing activities, it is not the end of the measurement process but rather the beginning. Advertisers must use measurement reports to continuously improve effectiveness. Actionable measurement involves leveraging data and insights to inform the planning of future campaigns. Building upon the previous principles, unified and reliable measurement provides vital cross-channel insights to drive efficiency and performance throughout the customer journey. For example, Amazon Ads offers a media planning package based on both proprietary and third-party measurement sources. This includes collaborating with external providers on solutions like marketing mix modeling studies, which help advertisers plan an optimal marketing mix before launching a campaign. Once a campaign is underway, actionable measurement means providing real-time or near-real-time reporting and insights that allow timely adjustments and optimization during the campaign. Providing the right metrics, along with the ability to take action based on those metrics (before, during, and after a campaign), is how advertisers can derive value from a strong measurement strategy.

Build your strategy around unified, reliable, and actionable measurement

As marketing becomes more complex, advertisers' measurement strategies need to keep pace. While strategies may vary depending on industry, company size, maturity, business goals, and more, the aforementioned principles represent effective measurement parameters for today's marketing landscape. To drive business growth, marketers need a holistic measurement approach across all channels, built on accurate inputs and action-oriented insights. Unified, reliable, and actionable measurement serves as the foundation for a successful and impactful marketing strategy in today's world.

o drive business growth, marketers need holistic measurement across channels, based on accurate inputs and oriented toward action.